Analyst Gautam Khanna from TD Cowen maintained a Hold rating on Woodward and increased the price target to $290.00 from $260.00.
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Gautam Khanna has given his Hold rating due to a combination of factors influencing Woodward’s current and future performance. The company’s recent earnings per share exceeded expectations, primarily due to a lower tax rate, while sales were slightly above projections. However, the earnings before interest and taxes remained in line with expectations, suggesting stable but not exceptional operational performance.
Additionally, Woodward’s aerospace segment showed strong aftermarket sales growth, driven by demand in China and favorable pricing. Despite this, original equipment demand in the aerospace sector was subdued, partly due to Boeing’s inventory adjustments. In the industrial segment, demand remained steady, but the lack of visibility in the Chinese market poses a risk. The company’s new capital expenditure project for the A350 spoiler actuation work is a positive development, yet it is noted that the profitability of this project may not be significant. These mixed signals contribute to the Hold rating, as the stock’s potential upside is balanced by these uncertainties.
Based on the recent corporate insider activity of 71 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of WWD in relation to earlier this year.